According to AS, Isco and his agent met with Txiki Begiristain for the final round of talks about his personal contract, which was concluded successfully. Now, ManCity has to only negotiate with Malaga, and Malaga are expecting to get the release clause written in his contract, i.e. 35 million euros.
Txiki apparently wants to negotiate, I don't know what is there to negotiate. Isco is Malaga's leader, they need money, and ManCity are money bags. Malaga should ask for 40 million euros when Txiki shows up for negotiations
Seriously though, a bit sad to see him leave Malaga. I really think both him and Pellegrini like Malaga, and wanted to stay there, ideally. This also tells me that perhaps Pellegrini to ManCity has influenced Isco's decision a lot. A big question though is how all of Nasri, Silva and Isco, players of the same ilk, will play together. It would have been impossible with Mancini's set up and football, but I think with Pellegrini, it is possible (4-2-3-1).
There are also rumors of Nasri going back to France, so may be that will happen. But Isco is in line to be a superstar in England.